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Graco Announces Business Restructuring Plan to Drive Growth
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Graco Inc. (GGG - Free Report) recently announced its plan to shift to a new organizational structure to capitalize on growth opportunities and drive profitability and operational efficiency. The company expects to establish a market-oriented global structure that will enable it to enter lucrative markets, strengthen its long-term position and boost growth.
GGG’s shares inched down 0.2% yesterday, ending the trading session at $83.71.
Inside the Headlines
Effective Jan. 1 next year, the company will reorganize its operating structure to a global and customer-centric model. As noted, it will operate under four business divisions, Industrial, Expansion Markets, Contractor and Powder. Graco will integrate its independent operations based in Europe, the Middle East and Africa, South and Central America and Asia Pacific regions into these business divisions.
Per the restructuring plan, GGG will create a new global Industrial Division, which will be comprised of its existing Industrial and Lubrication Equipment Divisions and the Process Transfer Equipment business. The new Expansion Markets Division will include several businesses like environmental, semiconductor, electric motors and high-pressure valves, along with select future ventures and buyouts in new or adjacent markets.
The company’s Contractor Division will be reorganized to cater to the requirements of its global customers whereas the Powder Division will continue to operate under the existing business structure.
Beginning in January 2025, GGG will operate its businesses under three reportable segments, which are Contractor, Industrial and Expansion Markets. The Industrial segment will consist of the newly created Industrial Division and the Powder Division. The Expansion Markets segment will be comprised of the Expansion Markets Division while the Contractor segment will include the Contractor Division.
GGG’s Zacks Rank and Price Performance
Image Source: Zacks Investment Research
Graco currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 5.5% in the past three months compared with the industry‘s 5.9% growth.
Graco expects new products in the Contractor segment to provide incremental sales in 2024. The company’s solid liquidity position adds to its strength. However, weakness in the broader industrial sector has been adversely impacting its results of late. For 2024, it expects organic revenues to decline in the low single digits from the year-ago level.
The Zacks Consensus Estimate for the 2024 earnings per share has decreased 1.7% to $2.98 in the past 60 days.
Stocks to Consider
Some better-ranked companies from the same space are discussed below.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%. In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%. In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
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Graco Inc. (GGG - Free Report) recently announced its plan to shift to a new organizational structure to capitalize on growth opportunities and drive profitability and operational efficiency. The company expects to establish a market-oriented global structure that will enable it to enter lucrative markets, strengthen its long-term position and boost growth.
GGG’s shares inched down 0.2% yesterday, ending the trading session at $83.71.
Inside the Headlines
Effective Jan. 1 next year, the company will reorganize its operating structure to a global and customer-centric model. As noted, it will operate under four business divisions, Industrial, Expansion Markets, Contractor and Powder. Graco will integrate its independent operations based in Europe, the Middle East and Africa, South and Central America and Asia Pacific regions into these business divisions.
Per the restructuring plan, GGG will create a new global Industrial Division, which will be comprised of its existing Industrial and Lubrication Equipment Divisions and the Process Transfer Equipment business. The new Expansion Markets Division will include several businesses like environmental, semiconductor, electric motors and high-pressure valves, along with select future ventures and buyouts in new or adjacent markets.
The company’s Contractor Division will be reorganized to cater to the requirements of its global customers whereas the Powder Division will continue to operate under the existing business structure.
Beginning in January 2025, GGG will operate its businesses under three reportable segments, which are Contractor, Industrial and Expansion Markets. The Industrial segment will consist of the newly created Industrial Division and the Powder Division. The Expansion Markets segment will be comprised of the Expansion Markets Division while the Contractor segment will include the Contractor Division.
GGG’s Zacks Rank and Price Performance
Image Source: Zacks Investment Research
Graco currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 5.5% in the past three months compared with the industry‘s 5.9% growth.
Graco expects new products in the Contractor segment to provide incremental sales in 2024. The company’s solid liquidity position adds to its strength. However, weakness in the broader industrial sector has been adversely impacting its results of late. For 2024, it expects organic revenues to decline in the low single digits from the year-ago level.
The Zacks Consensus Estimate for the 2024 earnings per share has decreased 1.7% to $2.98 in the past 60 days.
Stocks to Consider
Some better-ranked companies from the same space are discussed below.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%. In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 earnings has increased 1.3%.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%. In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.